Samsung Offers EU No Patent Legal Battles With Rivals for 5 Years to Avoid $17.3B Fine

To avoid paying a hefty $17.3 billion fine, South Korean tech giant Samsung offered to the European Union (EU) not to engage in a legal patent war with its rivals for five years.

YouTube/DahRa Shukla

The fine was in response to Samsung's multiple lawsuits against Apple in the UK, Germany, France, Italy and The Netherlands to block the sales of Apple devices such as the iPhone, iPad and iMacs for violation of standard essential patents (SEP).

Europe's Antitrust Commissioner Joaquin Almunia said the EC is asking for comments from the public on the proposed Samsung deal.

Besides the proposed 5-year moratorium, the Seoul-based company also offered to enter into a 12-month negotiating period when other companies see to license patents from its SEP portfolio. Failure of negotiations would lead to an independent arbitrator setting the terms unless Samsung and the applicant prefer to settle the matter in court.

If the EU will agree to the Samsung proposal, it will enforce the agreement under Article 9 of EU's antitrust regulations. A violation by Samsung would lead to a fine of up to 10 per cent of the company's global turnover on top of the $17.3 billion original fine. Violation of Article 9, however, is not tantamount to admission of guilt which would allow Samsung to save face.

The decision applies to Samsung only. Apple and other companies could seek court injunctions against their rival with SEP violation lawsuits. The ruling aims to provide high importance to effective patent protection and an efficient patent system.

"Enforcing patents through injunction can be perfectly legitimate. However, when patents are standard essential, abuses must be prevented so that standard-setting works properly and consumers do not have to suffer negative consequences from the so-called patent wars. If we reach a good solution in this case, it will bring clarity to the industry," Mr Almunia said in a statement.

The EU initiative would hopefully stop the long-running patent battles among the major tech firms such as Samsung, Apple, Microsoft, Google and Nokia.

However, the ruling applies to the EU only. Apple and Samsung are still locked in court battles in the U.S. and Asia. Competition between Apple and Samsung in the U.S. will probably intensify further as the South Korean giant expands its presence in the country by breaking ground on Wednesday at a large Silicon Valley research center in Mountain View, California, less than 10 kilometres away from Apple's Cupertino campus.